Yellen Concerned about Israel's Threats to Cut off Palestinian Banks

US Treasury Secretary Janet Yellen attends a press conference at the US Ambassador's residence in Beijing on April 8, 2024. (Photo by Pedro Pardo / AFP)
US Treasury Secretary Janet Yellen attends a press conference at the US Ambassador's residence in Beijing on April 8, 2024. (Photo by Pedro Pardo / AFP)
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Yellen Concerned about Israel's Threats to Cut off Palestinian Banks

US Treasury Secretary Janet Yellen attends a press conference at the US Ambassador's residence in Beijing on April 8, 2024. (Photo by Pedro Pardo / AFP)
US Treasury Secretary Janet Yellen attends a press conference at the US Ambassador's residence in Beijing on April 8, 2024. (Photo by Pedro Pardo / AFP)

US Treasury Secretary Janet Yellen said on Thursday she was concerned by a threat from Israel to cut off Palestinian banks from their Israeli correspondent banks, a move that would close a critical lifeline for the Palestinian economy.

Yellen told a news conference ahead of a G7 finance ministers meeting beginning on Friday that the US and its partners "need to do everything possible to increase humanitarian assistance to Palestinians in Gaza, to curtail violence in the West Bank, and to stabilize the West Bank's economy."

She said she would bring up the issue at the meeting of the Group of Seven industrial democracies in the lakeside resort town of Stresa in northern Italy. "I expect other countries to express concern about the impact of such a decision on the West Bank economy. I think this would have a very adverse effect also on Israel."

Israel's Finance Minister Belazel Smotrich has said he cannot renew a waiver that expires on July 1 which allows Israeli banks to process shekel payments for services and salaries tied to the Palestinian Authority, Reuters reported.

In a post on the X social media site reacting to Yellen's comments, Smotrich said he could not sign the waiver because Palestinians are still funding "terrorism" and Israeli banks can be sued for violating anti-terrorism financing laws.

"The financial system of the Palestinian Authority is infected with terrorism up to its neck," said Smotrich, a member of a far-right Israeli coalition partner that supports settlements in the West Bank. He called critics of the policy "hypocrites."

Yellen said it was important to keep open the Israeli-Palestinian correspondent banking relationships to allow battered economies in the West Bank and Gaza to function and help ensure security.

"These banking channels are critical for processing transactions that enable almost $8 billion a year in imports from Israel, including electricity, water, fuel, and food, as well as facilitating almost $2 billion a year in exports on which Palestinian livelihoods depend," Yellen said.

She added that Israel's withholding of revenues collected on behalf of the Palestinian authority also threatens the West Bank's economic stability.

"My team and I have also engaged directly with the Israeli government to urge action that would bolster the Palestinian economy and, I believe, Israel's own security," Yellen said.

Financial tensions between Israel and the US have risen over US sanctions imposed on Israeli settlers in the West Bank.



Sudan Lashes Out at Kenya's 'Hostile' Support for Rival Govt

Sudanese attend a protest in support of the army in the eastern city of Gedaref on February 22, 2025. (AFP)
Sudanese attend a protest in support of the army in the eastern city of Gedaref on February 22, 2025. (AFP)
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Sudan Lashes Out at Kenya's 'Hostile' Support for Rival Govt

Sudanese attend a protest in support of the army in the eastern city of Gedaref on February 22, 2025. (AFP)
Sudanese attend a protest in support of the army in the eastern city of Gedaref on February 22, 2025. (AFP)

Sudan's army-aligned administration lashed out Monday at what it called Kenya's "irresponsible and hostile" support for efforts by Khartoum's paramilitary rivals to form a parallel government.

Since April 2023, army chief Abdel Fattah al-Burhan and paramilitary Rapid Support Forces (RSF) commander Mohamed Hamdan Daglo, once allies, have been locked in a power struggle that has dragged the country into war.

Late Saturday, the RSF and a coalition of political and armed groups signed in Nairobi a charter that would pave the way for a "peace and unity" government in rebel-held areas, with Kenya's foreign minister later saying the proposed administration would restore "democratic governance" in Sudan.

Sudan's foreign ministry condemned the "dangerous precedent" on Monday, saying that "in a grave threat to regional security and peace, the Kenyan leadership has adopted the parallel government that the genocidal militia and its followers intend to declare in some of the remaining pockets under their control".

The government, it added, would take "the necessary steps to respond to this irresponsible and hostile behavior".

Those steps appeared to be taking shape Monday, with foreign ministry undersecretary Hussein Al-Amin Al-Fadil telling a press conference in Port Sudan that "measures against Kenya are escalating, and there are arrangements for economic measures, including a ban on importing Kenyan products".

He also said Sudan was in the process of withdrawing its ambassador from Nairobi and would file a complaint against Kenya through regional and international channels.

Among the signatories of the charter was a faction of the Sudan People's Liberation Movement-North led by Abdelaziz al-Hilu, which controls parts of the southern states of South Kordofan and Blue Nile.

The United Nations warned that the signing of the charter would "increase the fragmentation" of the war-torn country.

But in a post on X on Sunday, Kenyan Foreign Minister Musalia Mudavadi called the charter "a peace agreement", describing the proposed administration as a "a unity government" that would restore "peace, stability, and democratic governance in Sudan".

In its statement, Khartoum accused Nairobi of creating a "false facade for the militia to directly obtain weapons", while "relieving regional sponsors of some embarrassment".

The foreign ministry said that this "would expand the scope of war and prolong its duration" and warned of potential damage to bilateral ties with Kenya.

Fadil said Monday that Kenyan President William Ruto "has known personal interests with the militia leader and its sponsors, and is betting on losing cards".

Saturday's signing of the charter comes as the army and its allied factions are making advances against the RSF in the capital Khartoum and in central Sudan.

The war in Sudan, which has claimed tens of thousands of lives, erupted after a rift emerged between Burhan and Daglo over the future structure of the government.

The war has triggered the world's largest displacement and hunger crisis.

Both warring sides face accusations of committing grave atrocities against civilians, with their leaders sanctioned by the US.